PADI getting sued over Insurance Program

[ItsBruce]

Obviously, the above is hypothetical. But I was under the impression that A situation very similar started the whole thing.

But than again, I really don't have any knowledge of the case.

I was under the same impression, which really makes me wonder why the case is formulated like it is. Based on experience, I could come up with some speculative hypotheses, but there is no benefit to doing so at this time.

 

[the dive_addict]

Many insurance companies "reinsure".One company covers a small part of the risk,then buys insurance(reinsures) or contracts with another to cover the larger part.Think Lloyds of London.

 

[Thalassamania]

Many insurance companies "reinsure".One company covers a small part of the risk,then buys insurance(reinsures) or contracts with another to cover the larger part.Think Lloyds of London.

This is not a question of an insurance company passing some amount of the risk on down the line. This is a question of a diver training company (or book publisher, if you prefer) making a massive profit (2.2 million per year) by pretending (in what seems to be an illegal fashion) to be an insurance company. Bad Karma and worse publicity at best, fraud and malfeasance at worst.

 

[ItsBruce]

This is not a question of an insurance company passing some amount of the risk on down the line. This is a question of a diver training company (or book publisher, if you prefer) making a massive profit (2.2 million per year) by pretending (in what seems to be an illegal fashion) to be an insurance company. Bad Karma and worse publicity at best, fraud and malfeasance at worst.

Other than the "what seems" bit, you've hit the nail on the head. I reserve judgment on whether what PADI is alleged to be doing is illegal. However, illegal or not, certainly bad karma and worse publicity.

Here is a question worth considering: If the program was exactly as it is alleged, except that there was no self-insured retention (SIR) or deductible, would it be illegal for PADI to collect money from dive shops in exchange for naming them as additional insureds? (My guess is that the answer is "no." In construction work, property owners are regularly named as additional insureds on general contractors' policies and general contractors are named as additional insureds on subcontractors' policies. Part of the payment the particular named insured receives for the work it is doing is for naming additional insureds as additional insureds.)

So, if it is ok when there is no deductible, what is illegal about doing it with a deductible? There may be separate issues about disclosures, but if everything is disclosed, is it illegal?

 

[Thalassamania]

PADI was not, to my lay view, collecting money from dive shops in exchange for naming them as additional insureds, they were operating as an insurance company and laying off some of the risk to Livingston. As I understand it, perhaps incorrectly, this is illegal under California law.

 

[djcheburashka]

PADI was not, to my lay view, collecting money from dive shops in exchange for naming them as additional insureds, they were operating as an insurance company and laying off some of the risk to Livingston. As I understand it, perhaps incorrectly, this is illegal under California law.

What law, specifically? People keep saying it's against the law or against regulation, but no-one has identified any such law or regulation.

 

[PuMpUi]

What law, specifically? People keep saying it's against the law or against regulation, but no-one has identified any such law or regulation.

It may not be "wrong" ... but it SURE ain't Right !!!

Not having a dog in this fight personally, I can only speculate that there will be more "news" in the near future.

There's WAAAAY to much smoke for there NOT to be a fire !!!


Just my opinion.

 

[Thalassamania]

What law, specifically? People keep saying it's against the law or against regulation, but no-one has identified any such law or regulation.

The California Insurance Code. You can find it on line.

 

[The Chairman]

The California Insurance Code. You can find it on line.

C'mon, Tal. That's a cop out. Are you suggesting that they violated the entire document?

 

[Kingpatzer]

Well, it is PADI he's talking about